Odds Now At 75% (SOMEWHAT LIKELY) The U.S. Prime Rate Will Be Cut to 6.75% At the December 10, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 75% (somewhat likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to lower the benchmark target range for the fed funds rate (TRFFR) by 25 basis points (BPS) to 3.50% - 3.75% at the December 10^TH, 2025 monetary policy meeting, which would lower the U.S. Prime Rate to 6.75%.

 =======

On Inflation and Tariffs

  

Here are some clips from a November 3^RD, 2025 speech by Fed Governor Dr. Lisa D. Cook, at The Brookings Institution in Washington, D.C.:
 

"...My outreach to business leaders suggests that the pass-through of tariffs to consumer prices is not yet complete. Many firms have adopted a strategy of running down their inventories at lower price levels before raising prices. Others have reported waiting until tariff uncertainty is resolved before passing increases on to consumers. New car models, clothing lines, and other products will be coming onto the market, and that process will continue to provide firms with an opportunity to level set prices. As such, I expect inflation to remain elevated for the next year.

Nonetheless, the effect of tariffs on prices, in theory, should represent a one-time increase. It is encouraging that most long-run inflation expectations, including from the New York Fed Survey of Consumer Expectations, are low and stable at this juncture. When excluding tariff effects, 12-month core PCE inflation through September appears to be about 1/2 percentage point lower at about 2.3%, suggesting that underlying inflation has continued to make progress toward target. My assessment is that inflation is on track to continue on its trend toward our target of 2% once the tariff effects are behind us. The big caveat is that tariff effects must prove not to be persistent and that monetary policy remains appropriately focused on achieving that goal.

This is a point worth dwelling on for just a moment. The FOMC's firm commitment to its inflation mandate is imperative to ensure that inflation does remain in check, as I do expect in my baseline forecast. So let me be clear. I am committed to reaching our 2% inflation target. Moreover, I will be prepared to act forcefully, if the tariff effects appear to be larger or last longer than expected, or if other evidence emerges that higher levels of inflation are becoming entrenched in expectations.

In summary, after a temporary slowdown due to the government shutdown, I expect the economy to grow moderately over the medium term, supported by an AI productivity boom. I see the labor market as still solid, but I am highly attentive to downside risks. I see inflation as remaining somewhat elevated due to tariff effects and subject to upside risks..."

"...Labor Market

I will now turn to the labor market. We have less recent official data on the labor market, but the latest available indicators suggest that the labor market remains solid, though gradually cooling. The unemployment rate edged up over this summer from 4.1% in June to 4.3% in August, a relatively low reading one would expect to see in a healthy economy. To put 4.3% into perspective, the average unemployment rate over the 50-year period preceding the pandemic was 6.2%.

Since August, more recent labor-market indicators, such as UI claims, job postings, and individuals' assessments of job availability, signal little change to the August reading -- at most a small uptick. Taken together, the slightly rising  unemployment rate indicates the labor market is softening, but only modestly so..."

• Stay tuned...

=======

The United States Prime Rate was lowered to the current 7.00% on October 29, 2025.

=======

SUMMARY

• Current odds the U.S. Prime Rate will be cut to 6.75% at the December 10^TH, 2025 FOMC monetary policy meeting: 75% (somewhat likely.)

=========

--> www.FedPrimeRate.com Privacy Policy <-- --> www.FedPrimeRate.com Privacy Policy -- BACKUP<-- CLICK HERE to JUMP to the TOP of THIS PAGE >  SITEMAP  <

Odds Now At 90% (VERY LIKELY) The U.S. Prime Rate Will Be Cut to 7.00% At the October 29, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 90% (very likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to lower the benchmark target range for the fed funds rate (TRFFR) by 25 basis points (BPS) to 3.75% - 4.00% at the October 29^TH, 2025 monetary policy meeting, which would lower the U.S. Prime Rate to 7.00%.

 =======

On Jobs and Immigration Policy

  

 From the September 17, 2025 post-FOMC-meeting press conference:
 

"...CHAIR POWELL. Well, I was -- I was saying that what's happening in the labor market has more to do with immigration than it has to do with tariffs. That was the question I was answering.

So I wouldn't say that all of what's happening in the labor market is due to tariffs. I mean, you clearly have a slowing due to immigration. You clearly have a slowing in demand, which is now perhaps more than that in supply. And we know that because the unemployment rate has ticked up. So that's how -- that's what I meant by that..."

 And here's the latest from the White House, on the H-1B Visa program:

"...On Friday, September 19, 2025, President Donald J. Trump signed a Proclamation, 'Restriction on Entry of Certain Nonimmigrant Workers,' that took an important, initial, and incremental step to reform the H-1B visa program to curb abuses and protect American workers.

This Proclamation:

    Requires a $100,000 payment to accompany any new H-1B visa petitions submitted after 12:01 a.m. eastern daylight time on September 21, 2025. This includes the 2026 lottery, and any other H-1B petitions submitted after 12:01 a.m. eastern daylight time on September 21, 2025..."

In energy news, a potential inflation-stoker: for the week which ended on September 12, 2025, crude oil inventories decline by -9,3000,000 barrels, while the year-on-year change was -2,200,000 barrels.😐

Drivers out there may already see higher prices at the pumps...🛢😒⛽ 😑

       Stay tuned...

=======

The United States Prime Rate was lowered to the current 7.25% on September 17, 2025.

=======

SUMMARY

• Current odds the U.S. Prime Rate will be cut to 7.00% at the October 29^TH, 2025 FOMC monetary policy meeting: 90% (very likely.)

=========

--> www.FedPrimeRate.com Privacy Policy <-- --> www.FedPrimeRate.com Privacy Policy -- BACKUP<-- CLICK HERE to JUMP to the TOP of THIS PAGE >  SITEMAP  <

Odds Now At 100% (CERTAIN) The U.S. Prime Rate Will Be Cut to 7.25% At the September 17, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 100% (certain) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to lower the benchmark target range for the fed funds rate (TRFFR) by 25 basis points (BPS) to 4.00% - 4.25% at the September 17^TH, 2025 monetary policy meeting, which would lower the U.S. Prime Rate to 7.25%.

 =======

The Latest Jobs Data have
 Sealed the Rate-Cut Deal

 

• An estimated and tepid 22,000 nonfarm jobs were created during August, 2025, while the June, 2025 figure was revised to -13,000, the first negative reading since the beginning of the COVID-19 pandemic.
  
  
• Both month-on-month and year-on-year, job openings were negative according to the July, 2025 JOLTS report.
  
  
• Challenger, Gray & Christmas reported "...85,979 job cuts in August, up 39% from the 62,075 announced in July..."
  
  

  "...Employers announced plans to add 1,494 jobs in August, the lowest total for the month since Challenger began tracking hiring plans in 2009..."

• Year-on-year, the Core PCE Price Index, the Fed's preferred inflation measure, moved higher, from +2.8% for July, 2024, to +2.9% during July, 2025.
  
  
  • So the Fed will be cutting short-term rates while inflation remains untamed. Such drama!😌 
• One more reading on inflation before the September 17^TH, FOMC meeting: the Consumer Price Index, which will be released on September 11, 2025, 8:30 A.M., ET.
  
  
• Here's a communication from the White House, on tariffs. 

=======

Stay tuned...

=======

The United States Prime Rate was lowered to the current 7.50% on December 18, 2024.

=======

SUMMARY

• Current odds the U.S. Prime Rate will be cut to  7.25% at the September 17^TH, 2025 FOMC monetary policy meeting: 100% (certain.)

=========

--> www.FedPrimeRate.com Privacy Policy <-- --> www.FedPrimeRate.com Privacy Policy -- BACKUP<-- CLICK HERE to JUMP to the TOP of THIS PAGE >  SITEMAP  <

Odds Now At 80% (Likely) The U.S. Prime Rate Will Be Cut to 7.25% At the September 17, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 80% (likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to lower the benchmark target range for the fed funds rate (TRFFR) by 25 basis points (BPS) to 4.00% - 4.25% at the September 17^TH, 2025 monetary policy meeting, which would lower the U.S. Prime Rate to 7.25%.

 =======

The Latest

 

• Markets tanked on Friday, in response to reciprocal tariffs. 😐
  
  
• According the Labor Department, an estimated 73,000 nonfarm jobs were created last month. This anemic number, along with the recent trend, has dramatically boosted odds that the Fed will cut short-term rates on September 17, 2025.
  
  

  

  Nonfarm Payrolls - JOBS - July 2023 THRU July 2025

  
  
• Year-on-year, the Core PCE Price Index, the Fed's preferred inflation gauge, moved sideways: +2.8% for both June, 2024 and June, 2025.
  

=======

Stay tuned...

=======

The United States Prime Rate was lowered to the current 7.50% on December 18, 2024.

=======

SUMMARY

• Current odds the U.S. Prime Rate will be cut to  7.25% at the September 17^TH, 2025 FOMC monetary policy meeting: 80% (likely.)

=========

--> www.FedPrimeRate.com Privacy Policy <-- --> www.FedPrimeRate.com Privacy Policy -- BACKUP<-- CLICK HERE to JUMP to the TOP of THIS PAGE >  SITEMAP  <

Odds Now At 90% (Likely) The U.S. Prime Rate Will Continue at 7.50% After the July 30, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 90% (likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the July 30^TH, 2025 monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.

 =======

The Data

 

• According to revised government estimates, the American economy shrank by 0.5% during the first quarter of 2025. 
  
  
• Year-on-year (y-o-y), the Core PCE Price Index, the Fed's preferred inflation gauge, came in at 2.7% for May, 2025.
  
  The previous y-o-y reading (April, 2025) was revised up, from 2.5% to 2.6%.
  
  
• Despite the threat of stagflation, equities finished the first week of summer 2025 with gains. Both the S&P 500 and NASDAQ Composite indexes closed at all-time highs. 

=======

Stay tuned...

=======

The United States Prime Rate was lowered to the current 7.50% on December 18, 2024.

=======

SUMMARY

• Current odds the U.S. Prime Rate will continue at the current 7.50% after the July 30^TH, 2025 FOMC monetary policy meeting: 90% (likely.)

=========

 

--> www.FedPrimeRate.com Privacy Policy <-- --> www.FedPrimeRate.com Privacy Policy -- BACKUP<-- CLICK HERE to JUMP to the TOP of THIS PAGE >  SITEMAP  <

Odds Now At 90% (Likely) The U.S. Prime Rate Will Continue at 7.50% After the June 18, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 90% (likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the June 18^TH, 2025 monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.

 =======

Here's a clip from prepared remarks by Fed Governor Dr. Adriana D. Kugler, at the International Economic Symposium, hosted by the Central Bank of Ireland, in Dublin:

"...While the latest data show a resilient economy, I expect growth this year to be slower than last. Labor market conditions have been mostly stable. Inflation remains above the Federal Open Market Committee's (FOMC) 2% target, and further progress on disinflation has been slow. Looking ahead, I am monitoring the effects of changing trade policies, as I see them as likely having a significant effect on the U.S. and global economies in the near future..."

=======

Stay tuned...

=======

The United States Prime Rate was lowered to the current 7.50% on December 18, 2024.

=======

SUMMARY

• Current odds the U.S. Prime Rate will continue at the current 7.50% after the June 18^TH, 2025 FOMC monetary policy meeting: 90% (likely.)

=========

--> www.FedPrimeRate.com Privacy Policy <-- --> www.FedPrimeRate.com Privacy Policy -- BACKUP<-- CLICK HERE to JUMP to the TOP of THIS PAGE >  SITEMAP  <

Odds Now At 95% (Very Likely) The U.S. Prime Rate Will Continue at 7.50% After the May 7, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 95% (very likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the May 7^TH, 2025 monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.

 =======

Here's a quote from Fed Chair Jerome Powell from his April 4th speech at the Economic Club of Chicago...

“The level of the tariff increases announced so far is significantly larger than anticipated. The same is likely to be true of the economic effects, which will include higher inflation and slower growth.”

=======

=======

Stay tuned...

=======

The United States Prime Rate was lowered to the current 7.50% on December 18, 2024.

=======

SUMMARY

• Current odds the U.S. Prime Rate will continue at the current 7.50% after the May 7^TH, 2025 FOMC monetary policy meeting: 95% (very likely.)

=========

--> www.FedPrimeRate.com Privacy Policy <-- --> www.FedPrimeRate.com Privacy Policy -- BACKUP<-- CLICK HERE to JUMP to the TOP of THIS PAGE >  SITEMAP  <

Odds Now At 70% (Somewhat Likely) The U.S. Prime Rate Will Continue at 7.50% After the May 7, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 70% (somewhat likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the May 7^TH, 2025 monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.

 =======

Tariff Worries

The NASDAQ Composite Index ended the week at 15,587.79, down 22.73% from its December 16, 2024 record-high of 20,173.89: 🐻 Bear market.📉

Meanwhile, the DJIA and S & P 500 Indexes slipped closer to bear-market territory; both ended the week in the correction zone.

Investors have responded to the current administration's expanding tariff war.

Some A+ insights from a recent Fortune.com article:

"...The biggest winners from the tariffs, [Ford CEO Jim Farley] suggested, won’t be domestic automakers but Asian rivals that would face little additional impact..."

"...With 25% increases in the cost of parts, inflation would surge in maintenance and repair and insurance, which vehicle owners are already struggling to handle..."

=======

• And here's a detailed "Tariff Timeline" compiled by the superlative folks at USA Today.
  

  ========

DOGE Dismissals

Job cuts surged last month.

Total layoffs rose from a massive 172,017 cuts during February, to a whopping 275,240 during March of this year...😓

 

DOGE-related terminations were 216,670... ▽ CHARTS ▽

CHART: Job Cuts - March 2025 UPDATE
Copyright © 2025 Challenger, Gray and Christmas, Inc.

 =======

CHART: Job Cuts by Reason - March 2025 UPDATE
Copyright © 2025 Challenger, Gray and Christmas, Inc.

 =======

Stay tuned...

=======

The United States Prime Rate was lowered to the current 7.50% on December 18, 2024.

=======

SUMMARY

• Current odds the U.S. Prime Rate will continue at the current 7.50% after the May 7^TH, 2025 FOMC monetary policy meeting: 70% (somewhat likely.)

=========

--> www.FedPrimeRate.com Privacy Policy <-- --> www.FedPrimeRate.com Privacy Policy -- BACKUP<-- CLICK HERE to JUMP to the TOP of THIS PAGE >  SITEMAP  <

Odds Now At 90% (Likely) The U.S. Prime Rate Will Continue at 7.50% After the May 7, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 90% (likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the May 7^TH, 2025 monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.

 =======

Tariffs and Job Cuts

Here's a clip from the February, 2025 Leading Economic Index:

"...Given substantial policy uncertainty and the notable pullback in consumer sentiment and spending since the beginning of the year, we currently forecast that real GDP growth in the US will slow to around 2.0% in 2025.'..."

Two percent is too generous.

The repercussions from #POTUS47's tariffs, and layoffs from DOGE, have yet to be fully felt in the American economy.

The Federal Reserve's estimate of a +1.7% change in real GDP for 2025 is a bit more realistic.

The www.FedPrimeRate.com estimate for 2025 real GDP: Flat to +0.7%.

=======

 

Meanwhile, the tech-heavy NASDAQ Composite Index ended the week in correction territory, again.

 

Stay tuned...

=======

The United States Prime Rate was lowered to the current 7.50% on December 18, 2024.

=======

SUMMARY

• Current odds the U.S. Prime Rate will continue at the current 7.50% after the May 7^TH, 2025 FOMC monetary policy meeting: 90% (likely.)

=========

--> www.FedPrimeRate.com Privacy Policy <-- --> www.FedPrimeRate.com Privacy Policy -- BACKUP<-- CLICK HERE to JUMP to the TOP of THIS PAGE >  SITEMAP  <

Odds Now At 95% (Very Likely) The U.S. Prime Rate Will Continue at 7.50% After the March 19, 2025 FOMC Monetary Policy Meeting

Prime Rate Prediction

Prime Rate Forecast

As of right now, our odds are at 95% (very likely) the Federal Open Market Committee (FOMC) of the Federal Reserve will vote to leave the benchmark target range for the fed funds rate (TRFFR) at 4.25% - 4.50% at the March 19^TH, 2025 monetary policy meeting, leaving the U.S. Prime Rate at the current 7.50%.

 =======

Consumer Price Index (CPI) at 3.00% Last Month (Y-o-Y).

And, year-on-year, the Core CPI reading for January, 2025 was 3.26%!

So, why is inflation becoming a problem again?

Tariffs? Not likely.  Not yet anyway.

• The likely culprit = the supply of money in the American economy: M2.

Here's a chart from 2015 thru the end of 2024...👇

CHART: www.FedPrimeRate.com
 Monthly M2 Money Supply
 2015 thru 2024

Here is how the Fed defines M2 Money:

 

"...Beginning May 2020, M2 consists of M1 plus (1) small-denomination time deposits (time deposits in amounts of less than $100,000) less IRA and Keogh balances at depository institutions; and (2) balances in retail money-market funds (MMFs) less IRA and Keogh balances at MMFs.

Seasonally adjusted M2 is constructed by summing savings deposits (before May 2020), small-denomination time deposits, and retail MMFs, each seasonally adjusted separately, and adding this result to seasonally adjusted M1..."

Stay tuned...

=======

The United States Prime Rate was lowered to the current 7.50% on December 18, 2024.

=======

SUMMARY

• Current odds the U.S. Prime Rate will hold at the current 7.50% after the March 19^TH, 2025 FOMC monetary policy meeting: 95% (very likely.)

=========

--> www.FedPrimeRate.com Privacy Policy <-- --> www.FedPrimeRate.com Privacy Policy -- BACKUP<-- CLICK HERE to JUMP to the TOP of THIS PAGE >  SITEMAP  <